AI And The Surprisingly Bright Future Of Human Work

rom stone tools to smartphones, technology has always defined and transformed the way we work.

When Vanguard Group founder Jack Bogle joined Wellington Management in 1951, brokers phoned the accounting department twice a day to quote the prices of the Wellington Fund’s stocks and bonds. Accountants recorded the data in a leather-bound ledger and used 10-key adding machines to calculate the fund’s net asset value (NAV). Jack Bogle occasionally pitched in, double-checking the math with his slide rule.

When Glenn Booraem joined Vanguard in 1989, mainframe computers had pushed out the leather-bound ledgers and slide rules, but a lot of the work remained routine.

The accountants scoured those printouts for missing prices and calculation errors. They pulled data from five reports to calculate a fund’s net cash holdings, scratching out the math with mechanical pencils. At 5:30 sharp, they keyed the NAVs of 45 Vanguard funds into a Nasdaq terminal, which beamed them to the Associated Press for distribution.

The Apocalypse Isn't Coming After All

Within a few years, technology eliminated data retrieval and entry. Booraem tossed aside his mechanical pencil and developed a computer program to calculate a fund’s net cash position. The dot-matrix pricing reports and the Nasdaq terminal disappeared. Data feeds replaced them.

But accountants didn’t disappear. They found themselves freed up to tackle more challenging problems. They became more productive.

“Today, there’s almost no manual entry,” Booraem says. “That’s how you get from 45 accountants for 45 NAVS to more or less the same number of accountants for about 1,000 NAVs.”

Accountants now spend their time on “deeper analysis” — developing controls to prevent errors, investigating exceptions and solving new problems that the evolution of the capital markets and asset classes has created.

In the next decade, technology will continue to reshape most every job on the planet. The only difference is that the change will happen faster. The advent of robotics, big data and artificial intelligence are generating fears that technology will no longer simply complement our labor — it will replace it. An Oxford University study estimates that automation will threaten 47 percent of U.S. jobs.

The Future of Work looks at the data that inform apocalyptic projections of mass unemployment, reaching a different and much more optimistic conclusion. Jobs don’t disappear. They evolve.

Spending Your Time Better At Work

At Vanguard, Global Chief Economist Joe Davis and his research team have used a Department of Labor database to analyze jobs as the sums of their tasks. They found that since 2000, the mix of tasks that make up every job has changed. Some tasks in some jobs have disappeared, true — and yet unemployment is currently flirting with historical lows. There are about 11 million more jobs now than in 2007, just before the global financial crisis hit.

The relative mixture of tasks turns out to have changed. Repetitive chores like “recording information” and “controlling machines and processes” are on the way out. “Uniquely human” tasks like “resolving conflicts and negotiating with others” and “thinking creatively” are on the way in.

Sources: Vanguard calculations, using data from U.S. Department of Labor O*NET OnLine (2000–2015)

The visual above shows you the percentage change in the tasks that make up about 1,000 jobs, from 2000 to 2015. At the right, to give just one example, are photographers. Their mix of tasks has changed by more than 80 percent. Rather than “performing general physical activities” like exposing negatives and developing prints, like they used to, photographers now spend more time “thinking creatively” and “establishing and maintaining interpersonal relationships” with collaborators and clients.

In other words, they’re putting their time to better — more human — use. We could say the same about the other workers whose jobs appear on the visual.

More Like People, Less Like Machines

A bigger problem than a future without work might be a future without workers. Even as some industries struggle with labor shortages, the percentage of working-age Americans in the labor force has declined. The working population may not be ready to perform the uniquely human tasks that are increasingly driving economic growth.

What we should specifically do about this isn’t yet obvious, but the problem is one that we’ve successfully grappled with throughout economic history. And if history’s a guide, we’ll need once again to work more in a way consistent with what’s best about humans — and less in a way that requires us to imitate machines.

Please read on for a range of discussions of just what we workers can expect from the fast-arriving AI era — and of how we can best take advantage of the potential it will create, and the opportunities it will offer.

Notes: For more information about Vanguard funds, visit vanguard.comto obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.

All investing is subject to risk, including the possible loss of the money you invest.

Diversification does not ensure a profit or protect against a loss.

Vanguard Marketing Corporation is the distributor of the Vanguard funds. For more information or to obtain a prospectus, visitvanguard.com